Goldman Sachs is taking on Apple‘s much-anticipated credit card as part of pivoting from investment banking to consumer banking. But it’s not coming cheap: the company has spent $275 million this year on the Apple Card and other consumer-oriented initiatives.
“Cumulatively, we are making substantial, organic investments to build new businesses and digital platforms,” Goldman Sachs CFO Stephen Scherr told analysts today. “As these businesses scale over the coming years, this drag should not only reverse but become an accretive contributor to the firm’s [return on equity].”
That “drag” has been considerable. In recent years, the bank poured $1.3 billion on its consumer-friendly division Marcus, the Apple Card, and similar projects.
An Apple Card primer
Apple encourages iPhone users to make their purchases with Apple Pay, but not every store and restaurant supports this method of payment. That’s where the Apple Card comes in. It’ll be a physical card that can be handed to retailer or waiter. Very physical: cards will be made of titanium.
This service that goes with the card promises to track purchases and payments in an easy-to-understand interface.
Plus, there will be cash-back rewards for each purchase. Cardholders can get 2% on the amount of a purchase. That bumps up to 3% cash back on Apple products. The cash-back reward goes right into the Wallet app.